This article is for general information only and does not constitute financial advice.
Most BTL mortgages have a fixed rate for two or five years. When the fixed term ends, the rate reverts to the lender's standard variable rate (SVR), which is typically 2% to 3% higher. Staying on the SVR costs you money every month. Remortgaging onto a new fixed rate is the standard practice.
If the property has increased in value since you bought it, remortgaging also allows you to release equity. On a property purchased for £150,000 that is now worth £200,000, a 75% LTV remortgage produces a loan of £150,000. If your existing mortgage balance is £112,500, you release £37,500 in cash while maintaining 25% equity in the property.
When to remortgage
Start the process three to four months before your fixed term expires. Most lenders allow you to secure a new rate in advance (a "rate lock") without committing immediately. This protects you if rates rise before your current deal ends.
Remortgaging during a fixed term triggers an early repayment charge (ERC), typically 1% to 5% of the outstanding balance. On a £150,000 mortgage, a 3% ERC is £4,500. Unless rates have dropped enough to offset the ERC over the remaining term, it is rarely worth breaking early.
Product transfer vs remortgage
A product transfer stays with your current lender on a new rate. It is simpler (no legal work, no valuation in most cases) and faster (can complete in days). The downside: you cannot release equity and the lender may not offer the best rate in the market.
A full remortgage moves to a new lender. It requires a new application, valuation, and legal process (conveyancing takes four to eight weeks). The benefit: access to the full market and the ability to release equity.
For portfolio landlords, a mix of product transfers (for properties where you do not need equity release) and full remortgages (for properties where you do) is a practical approach.
Costs
| Cost | Typical range |
|---|---|
| Mortgage arrangement fee | £0 to £2,000 (some products are fee-free) |
| Valuation | £0 to £500 (many lenders offer free valuations) |
| Legal fees | £0 to £1,000 (many lenders offer free legals) |
| Broker fee | £0 to £500 |
Many lenders offer "free legals and free valuation" remortgage packages to attract borrowers. Factor in the arrangement fee, as a higher fee with a lower rate may not be better value than a lower fee with a slightly higher rate over the fixed term.
Releasing equity
If your property has increased in value through market growth or refurbishment, remortgaging at 75% LTV releases the difference between your current mortgage balance and 75% of the new valuation.
The released cash is not taxable (it is a loan, not income). You can use it for the deposit on another property, funding refurbishment, or any other purpose.
Be aware that releasing equity increases your mortgage balance and monthly payments. Run the rental income through the lender's stress test before assuming the higher mortgage is affordable.
Sources
- UK Finance. https://www.ukfinance.org.uk/ [Accessed 6 May 2026]